If the House proposal ultimately becomes law, the simplified acquisition threshold would more than triple from its current $150,00 level. Such a dramatic increase in the simplified acquisition threshold could affect nearly all federal contractors – especially small businesses.

Under federal statute, the simplified acquisition threshold (SAT) is set at $100,000. However, the law also requires an adjustment for inflation every five years. Because of the inflation review, the FAR was adjusted in 2010 to raise the threshold to $150,000, where it remains today.

Section 854 of the proposed 2016 NDAA would strike the $100,000 statutory threshold and replace it with a $500,000 threshold. The revised threshold would still be subject to inflation-based adjustments. Additionally, the proposed 2016 NDAA would increase the micro-purchase threshold from $3,000 to $5,000.